US mortgage rates hit their highest level in three years

Rising borrowing costs have pushed mortgage applications to lowest level since February 2025.mortgage rates in the United States have hit their highest level in nearly three years, as cost-of-living concerns weigh on Americans less than a month before the midterm elections.The average cost for a 30-year fixed-rate mortgage jumped 19 basis points to 7.49 percent for the week ending October 2 , according to the Mortgage Bankers Association’s weekly report released on Wednesday.Recommended Stories list of 4 itemslist 1 of 4Benchmark US government bond yield hits 19-year peak as oil prices surgelist 2 of 4US Fed raises interest rates for first time in three yearslist 3 of 4What to know about US Federal Reserve’s first interest rate hike in 3 yearslist 4 of 4Australia raises interest rates to 15-year highend of listMeanwhile, applications for mortgages tumbled 4.2 percent from the previous week, according to the report. Applications are at their lowest level since February 2025 and have fallen by almost half since the beginning of the year.“Very few homeowners have an incentive to refinance at these rates, and the jump in borrowing costs has caused many potential borrowers to step back from the purchase market,” Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, said in a press release.mortgage rates are closely tied to US 10-year Treasury notes. Earlier this week, those hit a 24-year high of 5.3 percent amid surging oil prices tied to ongoing tensions with Iran.Meanwhile, the yield on 30-year Treasury bonds rose to its highest level since 2002, at 5.7 percent on Wednesday.mortgage rates have jumped since late February, when the US and Israel first struck Iran. Since the strikes, mortgage rates have climbed 1.4 percent. inflation, which has risen by 3.4 percent from a year ago, is also putting pressure on mortgage rates.It comes as the cost of living is top of mind for voters as they approach the congressional midterm elections that could decide the balance of power in Washington, DC. According to a Reuters/Ipsos poll in late August, 47 percent of voters said that the cost of living was the single most important issue ahead of the midterms.